The table below shows monthly data collected on production costs and on the number of units produced over a twelve month period. Month Discussion Question July August September October November December January February March April May June Total Production Costs $230,000 250,000 260,000 220,000 340,000 330,000 200,000 210,000 240,000 380,000 350,000 290,000 Level of Activity (Units Produced) 3,500 3,750 3,800 3,400 5,800 5,500 2,900 3,300 3,600 5,900 5,600 5,000 a) Determine the variable cost per unit and the fixed cost using the high-low method. b) What is the equation of the total mixed cost function? c) Based on the High-Low method, what is the total production costs if 6,500 units are produced? d) Prepare the scatter diagram and insert the trendline or line of best-fit. Use a scale of 2 cm to represent 1,000 units on the x-axis & 2 cm to represent $50,000 on the y- axis. e) Using the line of best-fit, determine the company's fixed cost per month and the variable cost per unit. (Use 0 & 5,000 units.) f) Which of the two methods appear more appropriate? Explain your answer.

The table below shows monthly data collected on production costs and on the number of units produced over a twelve month period. Month Discussion Question July August September October November December January February March April May June Total Production Costs $230,000 250,000 260,000 220,000 340,000 330,000 200,000 210,000 240,000 380,000 350,000 290,000 Level of Activity (Units Produced) 3,500 3,750 3,800 3,400 5,800 5,500 2,900 3,300 3,600 5,900 5,600 5,000 a) Determine the variable cost per unit and the fixed cost using the high-low method. b) What is the equation of the total mixed cost function? c) Based on the High-Low method, what is the total production costs if 6,500 units are produced? d) Prepare the scatter diagram and insert the trendline or line of best-fit. Use a scale of 2 cm to represent 1,000 units on the x-axis & 2 cm to represent $50,000 on the y- axis. e) Using the line of best-fit, determine the company's fixed cost per month and the variable cost per unit. (Use 0 & 5,000 units.) f) Which of the two methods appear more appropriate? Explain your answer.

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Description: The table below shows monthly data collected on production costs and on the number of unitsproduced over a twelve month period.MonthJulyAugustDiscussion QuestionSeptemberOctoberNovemberDecemberJanuaryFebruaryMarchAprilMayJuneTotal ProductionCosts$23

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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